RUSSIA MONITOR MONTHLY 05/2019

Contents

The hydrocarbon sector in the Russian Far North has seen the rapid development as evidenced by discovering oil-rich fields by the Yenisei River or Novatek’s plans to build the third LNG project in the Yamal region. Private and state-run oil companies are making their best efforts to surpass one another while outlining their ideas on expanding oil infrastructure and production.

If Republicans and Democrats from the Trump administration and the U.S. Congress, which stand on different sides of the political barricade, can unite their forces, they may speak with one voice when criticizing Gazprom’s Nord Stream 2 energy pipeline project. In May, bipartisan efforts were made to intensify work on sanctions targeted at entities involved in building the Nord Stream 2 gas pipeline running from Russia to Germany.

On May 30, Russian foreign and defense ministers paid a visit to Japan to hold talks with their Japanese counterparts Takeshi Iwaya and Taro Kono. The meeting ended in failure as no progress has been made in the years-long territorial dispute over the Kuril Islands. So Russia and Japan chose to focus on military issues, with the latter protesting against Moscow’s military buildup plans in the disputed area.

Russia’s largest gas pipeline venture has so far been developing without significant problems that had slowed down the implementation of a gas project on the northern flank. Unlike the case of the Nord Stream 2 gas pipeline, Gazprom has not encountered any major obstacles while constructing TurkStream.

Russian Foreign Minister Sergei Lavrov denounced a raid launched by Kosovo police in the Serb-dominated north of the country as “provocation.” Among detained in the incident was a Russian citizen, released after Moscow’s intervention. The incident sparked off Serbia’s violent reaction, prompting the country to put its army on full combat readiness.

Russia continuously threatens with alleged danger from the so-called Islamic State and back the Taliban. It also called on the parties to the conflict to launch a peaceful dialogue while urging the United States and NATO to withdraw from the war-ravaged country. Moscow’s primary goal in Afghanistan consists of becoming a key mediator in the Afghan civil war and securing dominant influences in Kabul.

The oil output-cut agreement is set to expire by the end of June 2019, putting an end to six months of restriction in oil production imposed on OPEC+ countries. And it is possible that this will also halt the belt-tightening policy, making the oil-producing countries, with Saudi Arabia and Russia at the forefront, surge their overall oil output.

Top officials of Russia’s power structures paid a visit to Tajikistan’s capital of Dushanbe within a few days exactly several weeks after a meeting held between presidents of the two countries. Moscow has in recent time boosted its diplomatic activity in bilateral Russian-Tajik ties.

Russian authorities have consistently striven to expand the country’s influence on African soil, through both economic cooperation and arms exports and military presence in African countries. The presidents of Russia and the Republic of Congo have inked a bilateral agreement on dispatching Russian military specialists to the latter country while the official representation of the Russian army was established in the Central African government.

A recent poll has shown a decline in popular trust in Russian President Vladimir Putin, with the president’s popularity having dropped in May to its lowest level since 2006. The results do not pose an immediate problem for Putin, who won a landslide election victory, securing a new mandate in March 2018, yet could impel Russian elites to think what will happen next after Putin’s second term in office expires in 2024.

Coordination centers for crisis management were announced to be created in all Russian regions and subordinated to the Russian army. Once set up, new institutions will serve the regime to quell public unrest and to prevent more serious social revolts.

The Baltic NATO member states have noted Russia’s increased military activity around their borders in the second half of May. Russian jets were many times intercepted near the coastline of the Baltic States while a Baltic Fleet’s brand-new Karakurt-class corvette, armed with Kalibr cruise missiles, approached the Latvian maritime border.

Economic growth in Russia in the first quarter is slowest that initially expected while the country’s economy came to a sharp slowdown, the government said, explaining such a tendency with weak domestic demand after an increase in value-added tax. Poor economic growth affects all significant sectors of the Russian economy, along with the dramatic deterioration of citizens’ social situation.

Russian gas producer Gazprom’s management board proposed raising dividends for 2018, increasing it up to 150 billion roubles, which marked an all-time record both in the company’s history and the highest amount ever paid by a Russian state-run firm to its shareholders.

Since Donald Trump came to power, Russia has striven for reaching a U.S.-Russian bilateral agreement on the world’s most significant issues in which Moscow seems to hold particular interest. If possible, Kremlin officials would undoubtedly intend to reset bilateral ties between the two countries, marking an Obama-era solution.

Adverse effects of the Druzhba oil pipeline contamination crisis are likely to be felt until the end of the year. This was the most significant technical failure in its 55-year history while real normalcy is expected to come long after it had been promised.

An air incident has recently taken place during the joint Russian-Chinese naval drills in the Yellow Sea as two Russian aircraft penetrated South Korea’s air defense identification zone (ADIZ), forcing South Korea to mobilize its fighter jets in response. Not incidentally, Russian jets have so far violated the South Korean zone as many as four times.

Syrian government and allied Russian warplanes intensified in late April and early May bombardment of Syria’s rebel-held Idlib province and neighboring regions, killing dozens of civilians. And yet, the issue of the rebel-controlled enclave has come to a standstill due to Turkey’s calls for stopping the invasion by government forces, backed by Iranian and Russian allies.

A court in Podgorica found a group of people guilty of plotting a coup aimed at overthrowing the Montenegrin authorities back in the autumn of 2016. Armed attacks were planned and carried out under the supervision of Russian military intelligence officers. As initially planned, Serbian nationalists were supposed to trigger off a storm on the parliament building and assassinate the Montenegrin prime minister.

Russia’s 2018 military expenditure dropped, marking the falling tendency for a third consecutive year, the latest report by the Stockholm International Peace Research Institute (SIPRI) revealed. Pessimists in Moscow have already sounded the alarm, claiming that Russia halts further military spending while those of other countries have recently rocketed.